Melamchi Water Supply Project

III-timed Singapore visit may prove costly to government

Published On: February 9, 2019 10:24 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Feb 9: The deployment of a 4-member team to Singapore, including two government officials, to talk with the Italian contractor of Melamchi project was a calculated move to strengthen the contractor’s position in the imbroglio they created, government sources have claimed.

The contractor is quite likely to show proof of the meeting held in Singapore during an international arbitration later, which will weaken the government’s position in the legal battle, the sources said. 

The ill-timed visit, which came without any preparation just few days before the government was officially terminating the contract with Cooperativa Muratori e Cementisti (CMC) di Ravenna, has not helped the project in any way, two government sources told Republica. 

The delegation – comprising of deputy project director Bhoj Bikram Thapa, under-secretary (law) at the Ministry of Water Supply Guna Raj Shrestha, minister’s personal assistant Bijay Dev Bhattarai, and domestic contractor Dinesh Shrestha – met with the Italian contractor on Wednesday. 

A board meeting of Melamchi Water Supply Project (MWSP) in Kathmandu on Thursday had decided to terminate the contract as the contractor had failed to turn up within the given time of 14 days after issuance of notice of termination. The meeting in Singapore was held hours before the board meeting.

Two privy sources at the ministry and Office of the Prime Minister confirmed that the meeting in Singapore and the board meeting were not connected in any way, adding that there was no official from the secretariat of MWSP authorized to hold meetings in Singapore.  

Following the board meeting, the secretariat on Thursday dispatched contract termination documents to CMC’s office in Italy. The documents will be received by CMC before Sunday, informed Project Director Surya Kandel. He, however, said that he had no information regarding the trip. 

The government of Nepal had to terminate the contract and intimate it to the contractor by Sunday, as per legal obligation, to not lose the bank guarantees deposited by the contractor in different banks. 

It is, however, clear that the Singapore meeting could not give any output and there was no information about it at the board meeting that decided to terminate the contract. 

“The contractor may show a proof of the meeting for the purpose of tabling an arbitration, and manipulate the claims of bank guarantees that the government has already kept frozen,” added a government source. 

Minister for Water Supply Bina Magar had sent the team to Singapore with a ministerial decision to talk with the contractor, although officials at the Office of the Prime Minister and project management staff had suggested not sending the team. 

Spokesperson at the ministry Shankar Subedi confirmed that the minister had decided to send the team. He also informed that they were authorized to talk with CMC officials in Singapore, but did not confirm whether they had any meeting there. The team is returning home late Friday. 

After the contract termination process started with the issuance of termination notice two weeks ago, the ministry had the only option left to complete the remaining project works at the earliest. 

Minister Magar and other higher officials are apparently trying to bring back the Italian contractor instead of trying to take a practical approach of getting the remaining works done, according to the sources. 

Secretary Gajendra Thakur and Project Director Kandel had briefed the parliament’s Development and Technology Committee a week ago that they would go ahead on the remaining tasks immediately after formal termination of the contract. 

The committee had also advised the government to proceed to award the remaining contract through fast track procurement process and complete the project at the earliest.

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